In these tough fiscal times, all agencies are going to be
focusing on doing more with less.How
does one get more done with less budget and staff?Consider turning to Analytics.

The consulting firm Nucleus Research has been looking at the
Return on Investment [1](ROI)
for various types of IT projects.According to David O’Connell, Principal Analyst at Nucleus Research, “projects
involving analytics have some of the highest ROIs of any projects studied.”

Nucleus Research recently studied an analytics project IBM performed at DC
Water, the local water authority for Washington,
DC.In 2008, IBM began a first of a kind project
using advanced analytics to create a smarter water system that analyzes data on
valves, storm drains, service vehicles, truck routes and more to optimize its
infrastructure. With some pipes and other assets that date to the Civil War,
maintaining high levels of service while replacing older infrastructure is an
ongoing challenge.

The project has resulted in the following benefits from a combination of IBM
Asset Management and Analytics technology and services:

·Field Services trucks can be automatically
routed to optimize work management. This results in more work orders being
completed each week, as well as up to 20 percent reduction of fuel costs
related to fewer truck rolls and reduced "windshield" time.

·Revenue loss from defective or
degrading water meters allowed recapture of $3.8 M because the analytics behind
the advanced metering infrastructure delivers more timely identification and
replacement of those meters.Revenue was
also recaptured because DC Water can now identify and bill locations where
there is unmetered water usage.

·DC Water has been able to identify
assets most critically in need of repair using predictive analytics, so aging
infrastructure replacement programs can be more accurately scheduled,
preventing costly incidents that reduce service quality, such as outages and
water main breaks.This reduces both
maintenance labor costsand call center
costs associated with emergency incidents.

Nucleus Research reported in its case
study that the DC Water project resulted in $19.677 M of benefits over 3
years with a cost of $883 K, giving an ROI of 629%.

In 2010, Nucleus Research studied a number of other public
sector analytics projects.The results
from these projects are shown in the chart below.On average, the analytics projects have
resulted in an ROI of almost 600%!This
means that over 3 years, the projects have returned benefits 6 times the
original cost of the projects.The
payback period has been less than a year in all cases.This is important to government agencies because
it means you can see cost savings in the same fiscal year that you invest in an
analytics project.

According to David O’Connell, Principal Analyst at Nucleus
Research, “When government entities adopt
analytics, returns are high for two reasons.First, waste such as leaky water mains, defective meters, or benefits
overpayments can be identified and eliminated.Second, by making information more readily available, employees spend
less time looking around for information and more time getting their jobs done.”O’Connell went on to say, “Another improvement is better use of
workers’ time.The more an organization
knows about the public it serves, their needs, and the means of delivering
service, the smarter managers’ decisions are when they hand out workers’
assignments.”